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Spending Cuts
Topic Started: Jun 13 2006, 06:43 AM (117 Views)
cmoehle
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Chris - San Antonio TX
This article, Spending Cuts Even Democrats Can Support, discusses a small set of speding cuts that would save the US taxpayers around $300 billion a year.

  • Agricultural Subsidies: Everyone's favorite whipping boy, and for good reason. These subsidies are a handout to rich farmers, and they raise food prices for everyone. $20 billion.

  • Social Security for the Well-Off: Social Security is not means-tested; people with substantial retirement income get full benefits. This is insanity; recipients did not "save" the benefits they receive; these benefits come from taxes paid by current working generations. Cut Social Security expenditure, say, 20% by introducing a modest degree of means-testing. $100 billion.

  • Medicare for the Well-Off: Same deal as with Social Security. Raise premiums, deductibles, and co-pays in a means-tested manner to save 20% of current expenditure. $60 billion.

  • Higher Education for the Well-Off: State governments currently operate colleges and universities in a manner that makes no distributional sense. Children of millionaires pay the same highly subsidized tuition as children in poverty. State governments should emulate the private sector by setting a high tuition rate and then offering discounts on a means-tested basis. $50 billion.

  • Pork: Although many "bridges to nowhere" are small potatoes, the number of potatoes is large. A recent accounting by Taxpayers for Common Sense estimated 2005 earmarks at $24 billion; most of this is pure pork. Adding big ticket items like manned space flight, Amtrak subsidies, mass transit boondoggles like the Big Dig, senseless flood control projects undertaken by the Army Corps of Engineers, and subsidized disaster insurance, not to mention state and local pork, would easily yield substantial savings. $70 billion.

It's a good start!
Politics is the art of achieving the maximum amount of freedom for individuals that is consistent with the maintenance of social order.
--Barry Goldwater
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ngc1514
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Most of these "spending cuts" are actually increased taxes on the Well-Off. Taking money from people without providing any service for the cash is just another way to phrase "robbery."

You can't cut Social Security - at least not ethically - for someone who has been paying into the system his whole life just because he managed to save more and had a job with a better retirement program. This is why SS has both contribution and payout limits.

These cuts penalize people for doing well and the cuts are nothing more than wealth distribution schemes pandering to the lower economic levels.

Posted ImageEric
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cmoehle
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Chris - San Antonio TX
So taxing the rich more is unfair and removes incentives to get ahead. Only other option is spending cuts affecting everyone.
Politics is the art of achieving the maximum amount of freedom for individuals that is consistent with the maintenance of social order.
--Barry Goldwater
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ngc1514
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cmoehle
Jun 13 2006, 09:27 PM
So taxing the rich more is unfair and removes incentives to get ahead. Only other option is spending cuts affecting everyone.

I'd be bettter able to answer that question if you can tell me what the financial status of the "Well-Off" in that article might be. The same for your "taxing the rich." What defines rich in your question?
Posted ImageEric
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cmoehle
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Chris - San Antonio TX
You'd have to ask a Democrat who defines economics in terms of classes of haves and have nots. I think the author was poking fun at such an economic model.
Politics is the art of achieving the maximum amount of freedom for individuals that is consistent with the maintenance of social order.
--Barry Goldwater
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tomdrobin
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cmoehle
Jun 13 2006, 12:43 PM
This article, Spending Cuts Even Democrats Can Support, discusses a small set of speding cuts that would save the US taxpayers around $300 billion a year.

  • Agricultural Subsidies: Everyone's favorite whipping boy, and for good reason. These subsidies are a handout to rich farmers, and they raise food prices for everyone. $20 billion.

  • Social Security for the Well-Off: Social Security is not means-tested; people with substantial retirement income get full benefits. This is insanity; recipients did not "save" the benefits they receive; these benefits come from taxes paid by current working generations. Cut Social Security expenditure, say, 20% by introducing a modest degree of means-testing. $100 billion.

  • Medicare for the Well-Off: Same deal as with Social Security. Raise premiums, deductibles, and co-pays in a means-tested manner to save 20% of current expenditure. $60 billion.

  • Higher Education for the Well-Off: State governments currently operate colleges and universities in a manner that makes no distributional sense. Children of millionaires pay the same highly subsidized tuition as children in poverty. State governments should emulate the private sector by setting a high tuition rate and then offering discounts on a means-tested basis. $50 billion.

  • Pork: Although many "bridges to nowhere" are small potatoes, the number of potatoes is large. A recent accounting by Taxpayers for Common Sense estimated 2005 earmarks at $24 billion; most of this is pure pork. Adding big ticket items like manned space flight, Amtrak subsidies, mass transit boondoggles like the Big Dig, senseless flood control projects undertaken by the Army Corps of Engineers, and subsidized disaster insurance, not to mention state and local pork, would easily yield substantial savings. $70 billion.
It's a good start!

Agriculture subsidies raise food prices for everyone? I'm not necessarily in favor of them. But, I fail to see how they raise the cost of food. Now, taxing agricultural producers would have the effect of raising prices, but that's not what we are talking about. I've heard complaints from 3rd world agriculture that they can't compete with richer countries who subsidize their farmers. So, I fail to see how subsidizing them raises the cost of their product. Sounds like the author's logic is a bit tainted.

The Social Security, Medicare and tuition proposals are just the same old dem rhetoric in disguise. Instead of tax the rich more, it is give them less for their taxes than the less affluent. Same difference in the end. Also, low income tax payers enjoy Medicaid, which is almost totally free medical care if poor enough. Minimum SS payouts, which are not reflective of the formula for most. And, they enjoy a tremendous amount of preference in tuition grants and loans. All of this is preferential treatment over even the middle class taxpayer.

Pork would be a good candidate for spending cuts. But, one person's Pork is another's necessity. Unnecessary flood control projects? Who determines necessity? I wonder if shoring up the levees in N.O. would have been considered pork prior to Katrina?
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cmoehle
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Chris - San Antonio TX
"Agriculture subsidies raise food prices for everyone? I'm not necessarily in favor of them. But, I fail to see how they raise the cost of food."

Think it out. These subsidies cost in the billions, $20 billion according to the article--and that's low, $47 billion in 2004. Who pays for that? Taxpaying households. What are the subsidies typically for? Leaving land lie fallow. This lowers supply, increases demand and raises prices.


"Who determines necessity?"

Instead of sending money to Washington, keep it local where people better know what they need.
Politics is the art of achieving the maximum amount of freedom for individuals that is consistent with the maintenance of social order.
--Barry Goldwater
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tomdrobin
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cmoehle
Jun 14 2006, 05:41 PM
Who pays for that? Taxpaying households. What are the subsidies typically for? Leaving land lie fallow. This lowers supply, increases demand and raises prices.

I thought that most of the money was used to support prices, which provides stabilization that a open market wouldn't. Could the farm industry compete on a global scale without the supports? Leaving land lie fallow, is really a way of letting farm land rejuvinate, rather than farming it until it's a dust bowl. So that I see as a conservation program. Without incentives property owners would not conserve it on their own. So there is a national interest in land conservation.
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cmoehle
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Chris - San Antonio TX
Well, that stabilization has unintended consequences, higher prices for us.

I think we're already the top world supplier of farm produce.

Fertilization rejuvenates, not just leaving land lie fallow. Farmers are paid not to grow crops to articially raise prices.

Most of the farm subsidies at one time may have had "good" reasons for them, perhaps solving problem long since resolved, but they subsidies continue--buys votes.
Politics is the art of achieving the maximum amount of freedom for individuals that is consistent with the maintenance of social order.
--Barry Goldwater
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ngc1514
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The wife planted 5 or 6 tomato plants last year and did the same this year. I told her we were going after a subsidy to NOT plant them next year! We want to jump on this gravy boat as well.

I think the original purpose of the subsidy was the preservation of the family farm. Sorry, but I have no more interest in preserving family farms than I do preserving the village blacksmith. Most of the farming and most of the subsidy money goes to the huge agribusinesses as a form of corporate welfare.

Paper from the Cato Institute
Posted ImageEric
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tomdrobin
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cmoehle
Jun 15 2006, 12:21 PM
Fertilization rejuvenates, not just leaving land lie fallow. Farmers are paid not to grow crops to articially raise prices.

Fertilizer doesn't rejuvenate the soil. It merely provides the essential nutrients, Nitrogen, Phosporus and Potash to make plants grow. Soil continually farmed in this matter becomes depleted of the trace elements that provide for healthy nutritious food. That's one reason why organic produce has become popular of late.

The farming business is unique, in that investment to increase production directly transfers into dramatically lower market prices. A lose/lose proposition for the farmer.
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cmoehle
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Chris - San Antonio TX
Compost is the best fertilizer, Tom.

Increased production lowering prices should only occur in a closed market--created by government subsidies, tariffs, quotas and other protectionist measures. In an open and free market that should not happen, unless the farmer grows what the world doesn't demand.
Politics is the art of achieving the maximum amount of freedom for individuals that is consistent with the maintenance of social order.
--Barry Goldwater
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